On Nov. 30, 2018, the Department of Homeland Security issued the notice of proposed rulemaking to amend its H-1B cap-subject lottery process that USCIS conducts every year. The proposed rule seeks to amend the way H-1B cap-subject petitions are submitted for the lottery, and also the way H-1B cap-subject petitions are randomly selected. USCIS proposes a 30-day comment period that makes comments due on the proposed rule by or on Jan. 2, 2019. As of this writing, no group has formally requested an extension of the comment period, although it is widely believed that interested parties will request an extension of comment time. An extension, if granted, would lengthen the regulatory process time and make implementation by Q2 2019 (as stated) uncertain. As such, it is unclear whether this rule can be implemented for the H-1B cap season beginning April 1, 2019, for fiscal year 2020.

Background

The government’s fiscal year begins each year on Oct. 1. The soonest an H-1B petition can be filed is 180 days prior to the start date, and as Oct. 1 is the first possible start date, the petition cannot be filed until April 1 of each year, hence the H-1B lottery “opening” every year for filing. The H-1B cap each year allows for 20,000 slots for those who have a U.S. Master’s degree (or higher), and another 65,000 for everyone else. If USCIS receives more than 85,000 total petitions on April 1, it will conduct a random lottery to first select the 20,000 petitions that fall under the Master’s degree cap, then conduct a second lottery to select the remaining 65,000 numbers. In years past, the following number of petitions have been received*:

*Courtesy of DHS

The proposed changes will alter the manner H-1B cap-subject petitions are received, and the way they are counted, as explained below:

Electronic Pre-registration

The proposed rule will change the way H-1B petitions are filed. Instead of employers and/or their attorneys submitting an H-1B petition for every beneficiary, USCIS is proposing that employers first electronically register with the agency. Under the proposed rule, there would be a designated registration period before the petitions can be received. Once all employers electronically register the beneficiaries for which they wish to file H-1B petitions, USCIS will run a lottery system to meet the cap if the number exceeds 85,000. If the number of electronic preregistrations does not reach 85,000, USCIS will notify all petitioners that they may file the petitions. Otherwise, if USCIS runs a random lottery on the pre-registered names, petitioners will be notified whether their names have been selected and whether they may file H-1B petitions within a designated time frame.

Running the Lottery

In previous years, the lottery was conducted first for all U.S. Master’s degree (or higher) recipients to meet the 20,000 quota. After the Master’s cap lottery was run, USCIS would move the remaining U.S. Master’s petitions with all other petitions to select the remaining 65,000 petitions. USCIS is now proposing that through the electronic preregistration, the 65,000 “all” petitions lottery would be run first; then, to select the 20,000 Master’s petitions quota, only the remaining U.S. Master’s petitions would be run. USCIS reasons that this will give U.S. Master’s petitions a higher likelihood of being selected.

DHS also proposes to include a severability clause, where DHS would be able to implement either the electronic pre-registration or change how the lottery is run, independently, if they cannot be done together for any reason.

Implications

What does this mean for employers, USCIS, and law firms? For USCIS and employers, this proposal will drastically cut legal fees and costs. Petitioners will only be filing petitions that have already been “pre-selected,” and USCIS will not be returning a hundred thousand petitions, or more, by U.S. Postal Service. Employers will also be able to make alternate plans for their employees at an earlier date because the electronic lottery will be faster, instead of waiting until well into summer for a petition to come back as not selected in the lottery. Law firms will also be able to plan better for their clients in terms of alternative work authorization paths, should the petitioner not be selected in the electronic lottery.

It is unclear how long the processes will last, including the electronic pre-registration period, the selection period, or the filing period for selected beneficiaries. The proposed rule states that the filing period for H-1B cap-subject petitions will be at least 60 days.